Banned Feed Additives Exposed by Chinese Journalist

A March 15 exposé on Chinese consumer issues by China's Central TV highlighted the illegal use of banned feed additives in producing sheep. So-called "lean meat powders" (瘦肉精) that promote weight gain in animals were targeted by a CCTV journalist. These medications were originally developed to treat asthma and other breathing issues, but they also act like a steroid by promoting growth of muscle in animals. China has banned all beta agonists since 2002 because one of them--clenbuterol--can cause heart palpitations if ingested in high concentrations.

The reporter said he discovered dealers selling mutton from trucks parked at night just outside a food market in Zhengzhou, capital of China's Henan Province. A dealer who sells 200-300 carcasses per night said the meat could not be sold inside the market because the sheep had been fed a medication that would cause it to fail inspections. The dealer would not elaborate, but he did reveal that the meat came from Qing County in Hebei Province where 700,000 sheep are raised annually. 

The reporter visited Xinxing Town in Qing County where he met a farmer who raises 1000 sheep. The farmer told him there was a code of silence to not speak to strangers about their use of "stuff" in feeding sheep. 

Google Earth image confirms that villages in Qing County have dozens of barns with blue roofs and pens with dark brown soil for raising sheep. This village has 142 sheep farmers. The barns appear to be constructed on fields intended for use as cropland.

A sheep trader told the reporter he likes to buy sheep from Qing county because their carcasses have a high proportion of meat and bring good profits. The trader also declined to elaborate: "You know we're not allowed to talk about it, brother."

The reporter said he observed a farmer adding corn meal and peanut vines to his sheep's feeding trough. The farmer then grabbed a blue bag and mixed some white powder with the fodder. The powder was nearly invisible after mixing.

The reporter said he grabbed a sample of the powder which he later submitted for tests that showed it was a banned "lean meat powder."

The farmer explained that feeding animals the powder in their final month before slaughter increases muscle, reduces fat deposits, improves feed conversion and increases profit.

Farmers say village party secretaries warn them in advance about officials who plan to inspect farms. When they hear about an inspection they lock the door, run away and hide. The farmers have a reserve of "green" sheep that are not fed beta agonists so they can be mixed in with other sheep in truckloads going to markets or slaughterhouses to serve as designated test subjects.

As usual, the article made no distinction between three beta agonists: clenbuterol, ractopamine, and salbutamol. Ractopamine was designed to flush out of animal tissue before slaughter and is approved for legal use in 30 countries when used according to instructions; Japan and a number of other countries approve imports of meat containing ractopamine. China has a zero tolerance for traces of any beta agonist in meat, and Chinese news media continue to conflate ractopamine with clenbuterol, fueling uninformed hysteria.

Some may recall that the same program revealed Shuanghui company's purchase of pigs fed with clenbuterol exactly 10 years ago. 

The effects of high doses of clenbuterol (usually obtained by eating organs such as lungs and kidneys) on consumers sound not too different from the effects of monosodium glutamate which is used in nearly every restaurant in China. It's not clear whether anyone has ever gotten sick from eating animals fed with ractopamine. 

After the appearance of the "lean meat powder" article, China's agriculture ministry immediately ordered local officials to conduct a 3-month crackdown on use of "lean meat powder" by conducting surprise inspections and forming teams with police and market supervision authorities to give the crackdown more bite. Officials were ordered to dig deep into the "black supply chain," remove "protective umbrellas," and prosecute violators. Qing County launched a "sharp sword" campaign to remediate the problems pointed out in the exposé.

As part of the Phase One agreement, China pledged to conduct a risk analysis of ractopamine that would facilitate an evaluation of whether its blanket ban on the substance is science-based. China has not yet completed the review. 

Suspicious minds might suspect that this article was planted to generate hysteria over "lean meat powders" so that officials can point to consumer resistance to justify continuing their blanket ban on ractopamine. Or perhaps officials are maneuvering to restrict meat imports once the domestic swine industry has sufficiently recovered from African swine fever...

Ag Ministry Chastised for Statistical Fraud

Statistical fraud was uncovered in a month-long investigation of China's Agriculture Ministry last year. This revelation was made by an investigation team from the National Bureau of Statistics that looked into the agricultural ministry's statistics in August 2020. The team reported its results to Vice Minister of Agriculture and Rural Affairs Yu Kangzhen last week. 

The discovery of falsification and fraud in rural statistics was revealed quietly after the communist party had already declared complete victory over rural poverty last year and celebrated a "faster than expected" recovery of the swine herd in 2020. Both achievements were declared on the basis of statistical indicators.

The Ministry of Agriculture and Rural Affairs was criticized for not fully implementing the communist party central committee's pronouncements on statistical work and for failing to disseminate the regulations and opinions throughout its statistical bureaucracy. The Statistics Bureau faulted the Ag Ministry for failing to put management systems in place for some statistical items, for erroneous statistical surveys, and lack of standardization in issuance of statistical data and reports. Accountability for fraud and falsification is not timely, quality control is not in place, grass roots statistical teams are weak, and development of information systems has been lagging. 

Vice Minister of Agriculture Yu Kangzhen said the Ministry fully agreed with the Statistics Bureau's critiques and pledged to implement the recommendations, including deeper study of Xi Jinping's important directives on statistical work. Yu promised to raise the political position of statistical work and pledged to conduct a remediation.

The National Bureau of Statistics team was led by members of the Statistics Bureau's communist party organization, and Vice Minister Yu was also identified as a member of the Ag Ministry's party organization. The communist party decreed that rural poverty would be eliminated last year and assured the public that its policies would restore pork supplies. Thus, communist party members are under great pressure to demonstrate statistical proof of the party's successful policies. They are threatened with punishment if they fail to report statistics showing objectives were met, but they are also threatened with punishment if they inflate the statistics. 

"Some localities [add water to] statistical data". The local official is thinking about "falsification."
Source: Liaowang magazine.

Last year, the party's Liaowang magazine revealed that the statistical bureau was conducting investigations of false and fraudulent statistical reporting by local governments and ministries. According to Liaowang, the government gives out numerous benefits to companies and demands numerous reports. It would be embarrassing to refuse, and county or township governments commonly fill out reports and companies file fake reports to avoid angering the government or getting a poor credit rating. 

The Statistics Bureau's own agricultural census was riddled with fakery three years ago.

China ASF Resurgence with Stocking Density and Cold Weather

A resurgence of African swine fever during the winter months has interrupted the rebound of China's hog industry. The slowdown cooled off surging corn prices and sent soybean meal prices into a tailspin. 

According to surveys conducted by the "My Ag Commodities" site, sow numbers fell about 3-4 percent each month in January-February 2021 as hog production capacity suffered losses to varying degrees in regions across China. African swine fever and piglet diarrhea increased death rates, and panicked farmers sent numerous juvenile pigs to the abattoir, contributing to the recent decline in hog prices. With sow numbers declining and piglet prices rising in March, pork supplies are likely to be tight again in six months when the peak consumption season returns. 

Source: China National Bureau of Statistics raw material purchase prices.

A veterinary advice column blames the resurgence of ASF on the increased stocking density of animals, extremely cold weather, and appearance of new strains of ASF. Farmers became complacent in 2019 when ASF seemed to disappear. But with the rebuild of the swine herd in 2020, the greater density of animals aided the spread of the virus. The author notes that ASF virus contagion slowed in warm weather. As winter arrived, the effectiveness of disinfection and animals' resistance weakened. China has had the coldest winter in recent memory, with temperatures plunging as low as -30C (-22F) in northern regions. New strains of the ASF virus have appeared--strains spread by illegal vaccines as well as naturally-occurring attenuated strains. With dense pig populations and cold weather, the author wrote, one farm's infection quickly spreads throughout an entire region. 

The veterinary author notes that a targeted culling technique for stopping ASF outbreaks as soon as they are recognized had worked well in 2019 but is now failing. The author warned farms to sanitized stalls neighboring those where infected animals were discovered, avoid moving gilts into farrowing barns too early in view of the long incubation period of new strains, be vigilant in monitoring and testing herds, send managers into barns, and ensure that all employees understand and adhere to biosecurity requirements. 

The average Chinese corn price rose relentlessly in 2020, but it plateaued in 2021 as swine numbers fell and substitution of wheat and imported grains eased the demand for corn. Soybean meal prices fell as swine inventories peaked and substitution of wheat for corn reduced the need for high-protein soy meal in feed rations. However, soy meal prices remain well above last year and are about 1000 yuan/mt higher than they were in the peak panic-slaughter two years ago in the first ASF epidemic.

Source: China National Bureau of Statistics raw material purchase prices.

Source: China National Bureau of Statistics raw material purchase prices.

Negligible Risk, Maximum Hysteria for Imported Foods in China

A country that hides poisoned soil, keeps food supplies secret, covers up animal diseases and is unable to count farmland, crops, or animals says it is tracking millions of imported food shipments with anal precision. A government that once covered up toxic infant formula until the 2008 Olympics were over is now sounding an alarm about the dangers of imported food.

China's customs administration said last month they have discovered traces of the COVID-19 virus in 79 out of 1.49 MILLION samples taken from packages of imported frozen food since last year. That suggests a 0.0056 percent chance of encountering a virus. The chances of encountering a live virus are even lower, since most of these samples appear to have detected inactive remains of viruses.

Authorities said:

• They had suspended imports from 129 foreign suppliers in 21 countries. 
• A further 110 companies had voluntarily stopped shipping to China. 
• Border inspectors have disinfected 18.98 million shipments of imported frozen food arriving at Chinese ports. 
• Videoconferences and teleconferences have been held with counterparts in 108 countries. 
• Spot checks were conducted of 199 foreign processing facilities in 55 countries. 

Chinese State TV explains that imported cold chain food must have tests of outer packaging, inner packaging and the product itself. People working with imported cold chain food must have a nucleic acid test every 7 days. 

Domestic foods are not checked, even though there have been news reports of at least two incidents of COVID contamination of food from poultry processing plants in China with no apparent connection to imports. 

These strict measures were inspired by directives issued by Xi Jinping, customs officials said. 

In December 2020, China's Market Supervision Bureau launched a sprawling system to track imported frozen food from ports to supermarkets and to segregate imported food in warehouses and on retail shelves. The tracking system requires that shipments be accompanied by a nucleic acid test report, a disinfection report, batch number, exporter and importer information, port of entry, and the route taken from port to retailer. 

The data must be uploaded into an "imported cold chain food tracking platform" before it can leave a warehouse. A QR code must be available at the point of sale for consumers to scan with their cell phone so they can view the information. 

The system in Quanzhou, a city in Fujian Province, requires that information about the truck and driver's COVID test results be included, and information must be reported to city authorities 24 hours before entering a warehouse. The shipments must have permits to enter and exit one of the city's 378 cold storage facilities. Quanzhou has tracked 740 batches of imported food with the system. They have discovered 124 illegal shipments, taken 6,480 kg of food off shelves, and arrested 5 people. 

In Jiangsu Province's Yizheng City, a separate warehouse for imported frozen food was opened last month. 

At a warehouse in Nantong, a city in Jiangsu Province, a wholesaler showed the reporter that he could click on shipments of Uruguayan and Argentina cattle vertebrae and show all the tracking information, allowing consumers to see the source of imported meat and seafood products. 

In Dalian City, a port in northeastern China, there are 13 regulations and work programs associated with disinfection, testing, tracking, and segregation of imported food. 

Inspectors check a Beijing supermarket's imported products for
compliance with the city's tracking system.

In Beijing, district market supervision inspectors visited supermarkets last month to verify that imported foods were stocked on shelves separate from other products and displayed QR codes. The tracking system focuses on frozen meat and seafood, but the Beijing report noted that products such as frozen noodles, cheese, butter, ice cream, frozen juice, and frozen fruits and vegetables were included in the tracking system.

Any products in Beijing not in the system had to be removed from shelves and destroyed by February 12. Although tracking of products stored above 0 degrees C is not mandatory, inspectors advised supermarket managers to include them anyway as a reassurance to consumers. One manager of a supermarket in Beijing's Chaoyang district said his store had 100 imported dairy products stored at 2 to 4 degrees C. In Fengtai district, imported fruit such as kiwi, avocado, longan, and jackfruit had the QR code for the tracking system. 

Inspectors in Fengtai district recommended that stores include cherries in the tracking system--although they are not frozen--to reassure consumers after the virus was reportedly discovered on cherries in Jiangsu Province. Cherries must be placed where they cannot contaminate other products in the store. 

The Washington Post reported that the price of cherries imported from Chile has plummeted after the report of contamination. Young consumers who normally can't afford imported cherries are taking advantage by gorging on them up while the price is low. 

An official in Nantong, Jiangsu explained that the tracking system for imported food is entirely transparent. It enables authorities to determine where the shipment came from and where it went if a "problem" arises, the official said. What he didn't say is that no testing of facilities, products, workers or sleuthing has ever turned up any additional evidence of the virus in any case when a contaminated shipment was detected. The system--and the official news media reporting about it--stirs up hysteria among consumers over a negligible risk, imposing large costs on exporters and merchants who handle imported food to prevent a negligible risk. It has no actual benefit except to assuage concerns of consumers who have little or no confidence in the food safety regulatory system. 

China's "Deep Reform" Chains Peasants to Villages

China's leaders want to create modern scaled-up farms but they also want to keep peasants permanently tethered to their tiny plots of land through "collective" ownership. This system is portrayed as a security blanket for the rural population, but its real purpose is to prevent the peasants from causing trouble in cities. While leaders fret over "hollow villages" and idle farmland, these phenomena are the intended outcomes of official policy that calls for maintaining rural cubbyholes to stash peasants out of sight when things get tough. 

This year's "Document Number One" on rural policy proclaims the great historical significance of "decisive victory" in the war on rural poverty, then declares a massive rural construction project to create a livable, modern, scenic countryside during the next 5-year plan. The document obsesses on seeds and land zoning to maintain "food security," and it calls for "green" measures to correct the ravaging of soil, grassland, and water resources resulting from the last 35 years of food security policies. At paragraph 21, the document discusses "deeper reform" ordered up by Xi Jinping which means that agricultural land and the nation's vast peasantry will remain handcuffed together indefinitely under opaque collective ownership. 

In his comments on the "land issue" in an interview explaining China's "Document Number One," Agriculture Minister Tang Renjian proclaimed that land for agriculture and rural residences "cannot be transferred or disposed of like other assets." Tang emphasized that rural land plays a necessary role in ensuring food security, guaranteeing supply of agricultural products, and providing security for rural people. The real "security," however, is for the communist party rulers.

Minister Tang explained "stability" is the objective of collective land ownership. Tang noted that "over 30 million" rural migrants were left jobless at the peak of the COVID-19 pandemic last year. Yet the "overall situation remained stable," he said, because displaced migrants still had plots of land and houses in the countryside they could return to. Thus, the countryside plays a role as a "reservoir" (for rural labor) and as a "tool for stabilization," according to Minister Tang. What Tang meant to say was that Chinese cities had no encampments of unemployed homeless people under highway overpasses, no tractor blockades in Beijing, and no elections that could have allowed dissatisfied peasants to vote the communist party out of power. The Chinese army did not have to be called out to quell riots or uprisings. 

In explaining "deep reforms," Minister Tang argued that rural land institutions and policy design cannot be made on the basis of economic accounts. Minister Tang promised that a "new round of agricultural reform" in this year's "Document No. 1" and 14th 5-year plan will retain relations between rural people and land as the main line and focus on engaging small farmers with modern agriculture and industry chains. 

This year's "Document No. 1" calls for extending rural families' land contracts another 30 years  and emphasizes that family farms and farmer cooperatives will be the main actors in agriculture. The Document calls for a program to nurture new "family farmers" and another initiative to strengthen farmer cooperatives. "Dragon head enterprises" are to engage in innovation and be strengthened as well, and the Document calls for diverse types of new farming businesses. But the Document also recommends that companies remain in cities and towns while letting small farmers gain a greater share of industry value added.

In a separate Q&A on "Document No. 1", another rural official explained that it has taken years of work (about 10 years by my count) to issue certificates for 1.5 billion mu (100 million hectares) of collective farmland to 200 million rural households. That's half a hectare (1.25 acres) per family. If the land could be rented out for farming, the cash flow from the average landholding at current farmland rents would be about $330 per year; let's call it $1 per day (which happens to be China's poverty line in declaring its victory over absolute poverty). 

The official explained that another task on the "reform" agenda is to verify the identity of collective members, that is, villages need to determine who on the list of hundreds of families--many of whom have some or all members living and working elsewhere part or all of the year--is eligible to be a shareholder in village collective businesses. Also on the agenda is experimentation with new types of collective business organizations. Bottom line: after 70 years running the countryside, the Chinese communist party is still in the initial stages of figuring out how to make their collective organizations functional entities. 

The Document allows for only tentative steps to release peasants from their chains to the countryside. It calls for extending official urban residence status (城镇户口) only to rural residents who have worked for an extended time in small cities on an experimental basis. 

Progress in moving rural laborers to nonfarm jobs had already slowed to a trickle; then it was slammed into reverse last year. In 2020 the number of rural people working in nonfarm jobs (农民工) fell by more than 5 million. Growth in jobs for rural people had been marginal in 2018 and 2019, but this was the first decline since the numbers have been reported. The plunge in rural workers' employment at the peak of the pandemic was even bigger than the "over 30 million" cited by Minister Tang. According to the National Bureau of Statistics, at the end of February the number of rural people employed was down 54 million from the previous year. In March 2020 the unemployment rate for people with rural residence status peaked at 6.7 percent, a record high according to the Bureau. But the I calculate the 54-million year-on-year decline in employment in February equaled 18.6 percent of the rural nonfarm employment number the Bureau reported in 2019. 

Source: China National Bureau of Statistics.

China's focus during the COVID crisis was on creating jobs for new college grads and other urban people while sending rural people back to work rice paddies. While jobs for rural people were falling during 2020, urban employment rose by nearly 12 million. The Statistics Bureau reported that the urban unemployment rate peaked at 6.2 percent in February and fell to 5.2 percent in December. 

China National Bureau of Statistics.

Statistics demonstrate that China's agricultural sector does indeed act as a reservoir of surplus labor with low productivity. Agriculture accounts for 25 percent of China's employment, produces just 7 percent of GDP, and receives less than 3 percent of fixed asset investment. These statistics explain worries hidden behind the crowing of Chinese leaders about "decisive victory" over rural poverty and the rural building program that is the top line of this year's "Document Number 1." 

Agricultural shares of employment, GDP, and fixed asset investment in China